Partial fulfillment for the degree of Masters in Business Administration (MBA)

The study focused on the role of commercial banks as financing linkages for smallholder fanners in justifying their access to fonnal credit, in Migori County, based on the banks' experience and expertise in lending. The objectives Were to document the lending terms and conditions of the various banks, determine factors that influence credit accessibility, identify the role of formal credit and identity the credit constraints faced by the smallholder fanners in promoting crop Productivity. The study area was chosen because an estimated 80% of the residents here are primarily smallholder farmers dependent on agriculture for their livelihoods through various cropping and livestock activities. Agricultural production is largely subsistence due to inadequate financial resources to enhance Production, with major fann entetprises among smallholder fanners being sugarcane, tobacco, maize and tea. The County represents a cosmopolitan agricultural county and it has generated great interest in land SUbdivision. Multistage sampling technique was employed. Stratified random sampling tecbnique was adopted to select the sample respondents of 100 smallholder farmers. The county Was diVided into four divisions namely Rongo, Awendo, Mariwa and Oyani. Primary data on credit use and sources was collected through structured questionnaires. In the analysis mUltiple regression was run to address the objectives, using agricultural income from crops as the dependent variable and formal credit, training attendance, age. gender, education level, o/Hann income and distance to the market as the independent variables. The study found that commercial banks playa role in enhancing productive Performance of the farmers, however high interest rates, collateral and gender bias Were key constraints faced by the farmers. The study therefore recommends policy intervention to upscale the provision of credit to the smallholder farmers, introdUction of tailor made agricultural loan products, gender equity and working hand in hand with the fanners to improve information asymmetry on formal credit.